Property tax increase proposed

The Westminster city council proposed a 6-cent increase in the property tax rate - perhaps the largest such increase in the city's history - as part of a $27.2 million budget recommended for fiscal 2007 in a work session last night.

With soaring costs for staff benefits and water treatment projects, the council recommended an increase in the property tax rate from 40 cents per $100 of assessed value to 46 cents. The city's last property tax rate increase was a 4.8-cent jump four years ago.

Council members stressed that they want to enact a budget that avoids deficit spending. The city is starting the budgetary process this year short $4.5 million, Mayor Thomas K. Ferguson said.

There will be no new hires, no new vehicle requests, no new parks and recreation projects, said Councilman Robert P. Wack, chair of the finance committee.

"It was a very long, very difficult process," Wack said. "It was a team effort. Nobody enjoyed it, but we got the job done."

The council is expected to vote on the budget May 8. A public hearing is scheduled for May 1.

In the proposed budget, water and sewer fees would increase 20 percent - the first increase since May 2000, according to Joseph D. Urban, the city's director of finance.

For water, each household would be charged $22.32 per quarter for up to 6,000 gallons, up from $18.60. For sewer services, the rate would jump from $21.20 per quarter to $25.44.

The increased utility fees would primarily fund debt relief service for Westminster's two major public works projects, Ferguson said.

The city is constructing a $4 million water pipeline to Medford Quarry to help meet emergency needs during droughts. The city also is building a $5 million water treatment plant on Old Manchester Road.

"These basic infrastructures cost a lot of money and have to be maintained," Ferguson said. "It may not be a good message to deliver, but I think we're doing the right thing here."

City employees should see higher salaries and increased contributions to their retirement plans. About $555,000 will go toward higher salaries. The pay increases are based on the results of a coming pay equity study, city officials said.

The council also plans to raise city contributions to employee 401(k) retirement plans from 1 percent to 2 percent. By fiscal 2009, Ferguson hopes to match up to 6 percent of an employee's salary.

Residential property owners are not the only ones facing a 15 percent tax increase. Corporations would pay $1.15 per $100 of assessed personal property under the recommended budget. The current rate is $1.